With the Reserve Bank of Australia (RBA) raising the Official Cash Rate on Tuesday by 25bps to 2.6%, commercial property investors and developers will be looking to reassess where they see real value and how much risk appetite they are willing to accept. The rate hike marks the sixth rise from the RBA since May this year, with most economists predicting further rate rises over the coming 6-12 months, with the Official Cash Rate potentially reaching circa 3.5%.

The higher debt financing transaction cost creates challenges and opportunities for investors and developers. Investors continue to take a flight to quality approach, with the tenant covenant and WALE being the two major considerations. Essential services-themed properties hold their value and remain a hotly contested asset class. Sub $10m commercial properties continue to be well received, with cashed-up investors taking conservative levels of debt with some paying all cash. Most institutional investors have been reassessing their acquisition requirements to maintain their historic target distribution yield and total return hurdle.

With most ASX-listed real estate stocks being hit hard over the last 12 months, some investors are moving out of equities and into hard assets. These investors are looking for long-term passive income and value-add opportunities to extract a higher yield and valuation upside upon repositioning.

Traditional developers have narrowed their focus to premium development sites where they can secure a higher level of pre-committed leases or sales. Developers are seeking higher returns to offset the higher costs of financing projects and construction cost challenges. Residential developers are starting to become more active due to the supply crunch, historically low vacancy rates and increasing demand from investors.

Investors will keep a sharp eye on the Australia 10-Year Bond yield and look for opportunities with an appropriate risk premium to justify their investment decision. The 10-Year Bond yield currently sits at circa 3.72%, well above the 1.77% level we saw in January this year.

The weaker Australian Dollar (AUD) will likely spur foreign investment from some countries. With the AUD at a 2 year low to the USD, cashed-up investors will likely take advantage of our weaker dollar, slightly higher property yields and increasing deal flow. Active investors from Singapore and Hong Kong, whose currency has strengthened against the AUD, will likely lead the charge. We have seen this story play out many times before.

The shift in the market will see most investors and developers reset, reassess and move forward. Whilst some will adopt a sit-and-wait approach, savvy investors and developers will soldier on looking at the current market as an opportunity, not a risk. The fundamentals of the Brisbane market are solid; the infrastructure boom, population growth and transformation underway in preparation for the 2032 Olympic Games is creating an enormous real estate opportunity for investors and developers.

For a complete list of weekly commercial transactions in Queensland, visit McGees Wrap Up | McGees Property Brisbane

Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute legal, financial, or professional advice. While we strive for accuracy, we make no guarantees regarding the completeness or timeliness of the content. Always seek independent advice before making any financial or real estate decisions. We are not liable for any loss or damages arising from your reliance on the information provided.

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Of all the Australian Capital’s, Brisbane is showing the strongest recovery and leads the nation in domestic overnight expenditure, despite having a much smaller economy than our friends down south.

Since Brisbane was announced as the host city for the 2032 Olympic Games, we’ve seen significant growth the demand for live entertainment venues, accommodation assets and the infrastructure that supports these precincts.

Queensland’s visitor economy is forecast to generate $6.5bn per annum in tourist expenditure by 2031 yet we have one of the smallest supply pipelines of hotel rooms amongst all Australian Capital cities.

The costs of building materials and the shortage of trades along with the rising cost of capital has created a difficult environment for developers; but our underlying growth fundamentals should see interest return to the accommodation and hospitality sector in 2023.

We are seeing opportunities for development sites in the CBD & CBD Fringe, as well as refurbishment opportunities of existing accommodation assets.

For a complete list of weekly commercial transactions in Queensland, visit McGees Wrap Up | McGees Property Brisbane

Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute legal, financial, or professional advice. While we strive for accuracy, we make no guarantees regarding the completeness or timeliness of the content. Always seek independent advice before making any financial or real estate decisions. We are not liable for any loss or damages arising from your reliance on the information provided.

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During the COVID-19 pandemic, more Australians shopped online than ever before. According to stats, there were 1.7 million new online shoppers in 2020; with 1.4 million of those households continuing to buy online in 2021. The total number of households in Australia shopping online increased to well over 5 million.

With online shopping (and the pandemic’s lockdowns) came an increased desire for convenience. As such, Click & Collect services grew to 13.6% of all online purchases, and grocery shopping played a huge role in this.

For businesses themselves, Click & Collect provided them a way they could keep selling their products to customers. It was the most effective customer distribution channel for retailers, with 13% relying on delivery partners, and 22% sticking with their original methods.

Is it still in demand?

Although shops have opened back up again, there’s no doubt Aussies have become accustomed to the convenience services like Click & Collect offered during the pandemic. And given how busy life gets, it’s no wonder we’re still using this service (and online shopping in general) to save time.

It’s free, compared to delivery which can cost up to $15 for a load, and it saves us from having to wander through shopping centre aisles or carrying large loads of groceries, hardware and so on.

It can also help customers who live in apartment buildings or who live or work in places that make it hard to access their deliveries. It’s simply more convenient to order online and pick up their items on their way to work or during their lunch break.

For businesses, it can save money as well, as they don’t need to have so many delivery drivers operating.

For a complete list of weekly commercial transactions in Queensland, visit McGees Wrap Up | McGees Property Brisbane

Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute legal, financial, or professional advice. While we strive for accuracy, we make no guarantees regarding the completeness or timeliness of the content. Always seek independent advice before making any financial or real estate decisions. We are not liable for any loss or damages arising from your reliance on the information provided.

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This trend has led to growth in places like the Gold Coast and Sunshine Coast, where prices are growing much faster than in Brisbane. And where increased housing demand has led to greater infrastructure projects and more appeal for commercial property.

Most analysts believe property prices will slow down or decrease by the end of 2022. This is predominantly due to affordability issues and tightening of credit, along with increased interest rates causing financial strain for property owners.

But for now, demand for quality remains, and many investors (residential and commercial) have started looking outside the major centres of Brisbane, Gold Coast and Sunshine Coast to find bargain properties that will bring great returns.

So, where are they looking, and why?

• Townsville – $25 billion in infrastructure spend, affordable prices, high yields, low vacancy rates
• Rockhampton – affordable property with good yields and low vacancy
• Bundaberg – low median house price (under $350,000 as at September 2021) with high growth in the past five years
• Fraser Coast – increase of 10% residential property price growth in past five years
• Toowoomba – new infrastructure spend is set to increase, attracting commercial and industrial businesses to the region
• Douglas – 22% residential property price increase in the five years to September 2021

These figures will impact both residential and commercial property markets and getting the timing right for investment is imperative.

And it doesn’t matter what the market is doing, investors need to make smart choices – and that includes basing purchases on several things, including affordability, a strong and diverse local economy, and government investment in infrastructure. If you don’t have these, the investment will be a risk.

If you want to know more, or you want advice for your next commercial investment property, get in touch with the team at McGees today.

For a complete list of weekly commercial transactions in Queensland, visit McGees Wrap Up | McGees Property Brisbane

Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute legal, financial, or professional advice. While we strive for accuracy, we make no guarantees regarding the completeness or timeliness of the content. Always seek independent advice before making any financial or real estate decisions. We are not liable for any loss or damages arising from your reliance on the information provided.

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The coastal vibe of Maroochydore is currently one of rapid expansion, amid economic growth that has spurred a construction boom across the country that has now reached the shores of Maroochydore. The Sunshine Coast Council has approved a plethora of new building projects – over 500 units of housing have been approved by the council. It’s a good thing too, as there’s been an uptick in movers to the town which has necessitated this housing expansion.

A summary of the main projects in the expansion are listed below.

1. 12 Aerodrome Rd, Maroochydore

This $17 million-dollar, 24-unit project began life as a 49-unit apartment building, but was scaled back after initial council approval. It will now go ahead as a 24-unit apartment building, with a retail space occupying the first floor. The project is being spearheaded by Saintsun Aerodrome Pty Ltd.

• 2 Kuran St, Maroochydore

Intended for use as large family units, this three-unit development by Entertain Pty Ltd will offer picturesque views of the nearby Maroochy River, and first-floor indoor parking available.

• 29 Ridge Rd, Maroochydore

This two-storey, two-building, three-bedroom triumvirate of buildings, proposed by DDMR Investment Trust – is currently awaiting council approval after further information was requested by the council – that information will need to be provided by mid-October.

• Sunrise Dr, Maroochydore

This huge residential and aged-care complex on Sunrise Drive was proposed by Living Choice Australia and is currently undergoing assessment by the council’s planners and will need feedback from the community before it can proceed. At 128-units, the goal of Living Choice Australia would be to provide accommodations for those in the ageing population.

• 132, 134 & 136 Aerodrome Rd, Maroochydore

Plans have just been lodged for a major new residential development on Aerodrome Rd by Capital 22 Pty Ltd. These plans would replace the current op shop with a thirteen-storey building, consisting of three floors of office space, residential units, a ground-floor food-and-drink plaza, a fifth-storey communal area and pool. As well as a rooftop gym and outdoor area.

There’s no doubt that Maroochydore is expanding in many ways and in order to meet demand, building companies and investors are having to mix-and-match their spaces. It’s becoming the way of Australian construction – retail and residential sharing a common space.

For a complete list of weekly commercial transactions in Queensland, visit McGees Wrap Up | McGees Property Brisbane

Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute legal, financial, or professional advice. While we strive for accuracy, we make no guarantees regarding the completeness or timeliness of the content. Always seek independent advice before making any financial or real estate decisions. We are not liable for any loss or damages arising from your reliance on the information provided.

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The Gold Coast has been a hotspot for development since the economy began to roar back to life this year, following two years of lockdowns and loss of employment and loss of industrial activity. The construction industry across the country has been crying out for new developments and the Gold Coast has not disappointed. With much to be excited about in 2022 and beyond, construction in Australia is coming back with a bang and residents of the Gold Coast can look forward to these best ten projects.

1. The Star, Gold Coast

The Star Entertainment Group purchased a huge swath of land at Broadbeach Island and intends to turn the area into a mixed-use space for commercial and residential property. The Group will operate the Star Hotel, which will contain 1,200 hotel rooms, and nine hundred apartment residences, spread across four towers.

Estimated Completion Date: 2024

Project Value: ~$2B AUD

• La Pelago

A four-tower project yet again steals the show on the Gold Coast with developer Tim Gurner spearheading the project. The mixed-use development will be built above a mezzanine level, featuring 1,200 parking spaces, green space and a built-in lagoon. There will be food and beverage tenancies alongside the structures’ 900 residential units and 200 hotel guests.

Estimated Completion Date: Unknown

Project Value: $1.75B AUD

• Assana

Assana is one of many mixed-use answers to the Gold Coast’s lack of housing. With 47 of the 52-storey building being for residential use – two, three, four and five bedroom units being made available. The lower levels are occupied by a mezzanine, a ground-floor space containing a communal area for residents, alongside unassigned (as yet) commercial space. Macquarie Developments Group hopes to bring more family housing to the Gold Coast with these multi-bedroom units.

Estimated Completion Date: 2024

Project Value: $250M AUD

• Kirra Beach Hotel

Replacing the old Kirra Beach hotel will be a brand new structure with mixed-use potential. This exciting redevelopment by KTQ Group of Brisbane promises around 250 residence units (aiming at condo sale opportunities) – split between two towers of 15 and 10 stories, and a brand-new Kirra Beach boutique hotel.

Estimated Completion Date: 2025

Project Value: $380M AUD

• Paradiso Place

Another multi-purpose build has recently been approved on King Tutt’s Putt Putt site. The whopping 1.15ha site will soon give rise to “Paradiso Place”, a three-tower build of 38, 40 and 42 storeys respectively. The towers will be supplemented by a large retail space and a dining plaza, according to plans submitted to the Gold Coast City Council in mid-2021.

Estimated Completion Date: Unknown

Project Value: $880M AUD

Mixed-use projects are the thing at the moment in Australia’s construction landscape and the five above mixed-use projects are a surefire way to ensure that residential and commercial needs are met and exceeded!

For a complete list of weekly commercial transactions in Queensland, visit McGees Wrap Up | McGees Property Brisbane

Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute legal, financial, or professional advice. While we strive for accuracy, we make no guarantees regarding the completeness or timeliness of the content. Always seek independent advice before making any financial or real estate decisions. We are not liable for any loss or damages arising from your reliance on the information provided.

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While the housing market is absolutely on fire, the same cannot necessarily be said for the retail market in Brisbane. According to industry reports, Brisbane recorded a retail property vacancy rate of 18.9% in H1 2022. Though that might sound discouraging, according to Herron Todd White, Brisbane’s retail economy and therefore retail property is on its way back to its best.

What Have Been The Challenges?

The 18.9% vacancy rate reported in H1 of the year, of retail properties in Brisbane is mainly due to three mitigating factors.

COVID-19:

The lingering presence of the Omicron variant of COVID-19 rolled back suspected openings for certain businesses – and therefore their predicted profits.

Flooding:

High flooding in low-lying areas provided fresh challenges to businesses looking to occupy new spaces, or reopen old ones shuttered by COVID-19 protocols.

Financial Relief Stoppage:

As COVID-19 began to wind down in severity, Federal and State governments ended their financial support for small businesses – this will have significantly hurt businesses that came to rely upon that help during the pandemic.

Things Are Looking Up

However, despite the relatively-high vacancy rate, things are beginning to look up in Brisbane – particularly in the Central Business District, as students and foreign workers return to the country, and so, too, do the tourists. This means that there’s plenty of new opportunities within the empty buildings for food and beverage businesses that are looking to expand, perhaps utilising some of their Federal and State government funding from COVID-19 to take action on long-planned expansion.

Thanks to the vote-of-confidence from luxurious retailers like leather-goods giant Louis Vuitton opening a store in Queen’s Plaza, many other major retailers are seeing that as a good sign for the rejuvenation of the CBD to a bustling hub for retailers of all stripes.

All hope is not lost for Brisbane’s Central Business District’s retail spaces and with COVID-19 winding down (again), new opportunities for different types of retailers, H2 of 2022 looks like an opportunity for retail to bounce back.

For a complete list of weekly commercial transactions in Queensland, visit McGees Wrap Up | McGees Property Brisbane

Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute legal, financial, or professional advice. While we strive for accuracy, we make no guarantees regarding the completeness or timeliness of the content. Always seek independent advice before making any financial or real estate decisions. We are not liable for any loss or damages arising from your reliance on the information provided.

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Ken Morrison, the CEO of the Property Council of Australia, said confidence was down because of things like inflation, a lack of skilled workers, and broken supply chains.

“There is no doubt that the lingering effects of COVID, inflationary pressures and interest rate implications, energy and staffing shortages as well as global geopolitical issues, have left a dent in confidence, and that comes as little surprise.” (source: Property Council Media Release)

Though the survey showed a sharp drop in confidence about the future, some businesses are still optimistic about their own business conditions – and it remains positive in general at 118 index points.

Mr Morrison said when asked about their own business plans, respondents felt they were well-prepared to handle these headwinds. This, along with the historically low unemployment rate, is why confidence was still high.

One surprising find in the survey was that people believed moving forward, COVID was most likely to impact the commercial property sector. Prior to this, it was always said tourism and hotels would be impacted the most by the virus.

For a complete list of weekly commercial transactions in Queensland, visit McGees Wrap Up | McGees Property Brisbane

Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute legal, financial, or professional advice. While we strive for accuracy, we make no guarantees regarding the completeness or timeliness of the content. Always seek independent advice before making any financial or real estate decisions. We are not liable for any loss or damages arising from your reliance on the information provided.

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Plans are in progress for a build-to-rent apartment development located within a medical precinct on Brisbane’s southside. The project is designed to provide furnished studios specifically for health workers. Belong Capital has invested $2.65 million in purchasing a block of seven units at 55 Regent Street, Woolloongabba. The transaction was facilitated by Guy Stafford of McGees Property.

In addition to this acquisition, the company is also securing contracts for 57 and 59 Regent Street, encompassing a total area of 2020 square meters. Edward Fernon, a two-time Olympian and Chief Executive of Belong Capital, praised the location for its proximity to major amenities including a large shopping centre, the central business district approximately 2 kilometers away, nearby train stations, and close access to the Princess Alexandra Hospital.

“We are currently in the design phase, but the plan includes 15 apartments compliant with the National Disability Insurance Scheme, 50 to 60 co-living studios fully furnished for health workers, and 40 to 50 one and two-bedroom apartments,” Mr. Fernon explained. The development is also committed to sustainability, with plans to incorporate green incentives such as a fleet of Tesla electric vehicles available for car-sharing among residents.

Mr. Fernon, who represented Australia in the modern pentathlon at the 2012 and 2020 Olympics, founded Freedom Development Group in 2013. Since then, he has completed several projects across Western Australia and New South Wales. He anticipates submitting the plans, designed by Place Studio, to the Brisbane City Council in March.

We are at the tipping point. According to a survey from Australia Talks, 57% of rural families struggle to access child care. This compared to just 41% of families in inner-metro areas. Child care is a vital step in a child’s development. It’s their opportunity to socialise, start their education journey, and it allows parents to get back to work and time to practice self-care. In rural communities, parents may have to travel over 100 kilometres to find their nearest child care centre, with many closing down despite hundreds of nearby families.

There are few barriers to opening a new child care centre, which is why certain areas are over-supplied. This has led to many centres being squeezed out of business. There are simply not enough families to cater to. However, there is also a vast under-supply in other geographical areas.

With over 7,000 child care centres across Australia, we have swung from shortage to oversupply overall. However, in terms of investment, a well-located child care centre will meet the needs of the community. While in areas of oversupply, families don’t see the benefit. For example, the cost of running a licensed centre doesn’t change when there are more centres in the area. So, it’s impossible to reduce fees even if occupancy targets are met. Many child care centres cannot keep up with demand in inner-metro areas. It has resulted in many parents seeking to sign up for child care services before their children are even born. With the government providing additional subsidies, experts predict that the child care sector will need almost 40,000 new staff by 2023. However, with so many rural communities in need of child care, that number could be even greater as investors look to open in those areas.

This Article is for general information only and should not be relied on as advice. You should consider your personal situation and seek advice that is specific to your circumstances before making any decisions based on this information. Liability limited by a scheme approved under Professional Standards Legislation.

For a complete list of weekly commercial transactions in Queensland, visit McGees Wrap Up | McGees Property Brisbane

Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute legal, financial, or professional advice. While we strive for accuracy, we make no guarantees regarding the completeness or timeliness of the content. Always seek independent advice before making any financial or real estate decisions. We are not liable for any loss or damages arising from your reliance on the information provided.

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